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Other Written Communication

Date
Other Written Communincation
05/16/2000
00-65 PDF Image; Section 4m(1); Other Written Communication
The Division of Trading and Markets declined to take a CPO registration "no-action" position with respect to past acts by two individuals and certain entities operated by them, which acts would ordinarily trigger CPO registration requirements. The Division cited its long-standing practice of refusing to issue no-action or exemptive letters with retroactive application, and it specifically referred to language in the 1998 adopting release for Rule 140.99.
06/30/2000
00-78 PDF Image; Foreign Trading System No-Action Letter; Other Written Communication
The Commission issued a Statement of Policy expressing the view that foreign boards of trade that have placed automated trading systems in the U.S. pursuant to a Commission staff no-action letter should be permitted to list additional futures and option contracts through such systems without further regulatory action, subject to certain filing and certification requirements. The Statement of Policy does not apply to contracts that are covered by Section 2(a) (1) (B) of the CEAct.
12/23/1999
00-84 PDF Image; Rule 4.14(a)(6) and 4.31; Other Written Communication
The Division of Trading and Markets rejected the claim by an IB that the IB was not required to make available at its website the Disclosure Documents of CTAs whose performance the IB compiled, formatted and featured on the website, and in whose fees the IB shared (in at least some instances). Consistent with the guidance set forth in 63 Fed. Reg. 39104 (July 22, 1997), the Division required the IB: 1) to post on the website a summary risk disclosure statement; 2) to ensure that any third-party CTA information on the website (including performance) is accurate and not misleading; and 3) in each instance of fee-sharing or other direct compensation of the IB by a CTA, to make the CTA's Disclosure Document easily available on the IB's website.
04/20/1995
95-44 PDF Image; Rules 4.8, 4.12(b), 4.21(g)(1); Other Written Communication
(Advisory) - The "Instant Filing Advisory" will have the effect of substantially shortening the length of time it takes to process certain CTA and CPO disclosure documents. Disclosure documents that qualify for "instant filing" relief will be accepted upon filing
06/21/1995
95-62 PDF Image; CEAct Section 4m (1) and Rule 4.31; Other Written Communication
The Division of Trading and Markets provided information as to the disclosure document delivery requirements with respect to a registered CTA who was previously exempt from registration pursuant to an exemption under Section m(l) of the Act
07/28/1995
95-65 PDF Image; Rule 1.17, CEAct Section (c)(5)(iii); Other Written Communication
Professional traders and market makers in options meeting certain conditions may qualify for a reduction in the 4% short option value charge, upon approval by a designated self-regulatory organization
08/16/1995
95-71 PDF Image; CEAct Section 4d, 7 U.S.C 6d(1994); Other Written Communication
A company that is a registered CTA, and A, an associated person and controlling person of the company, previously requested relief for the company from registration as an IB under Section 4d and the Division granted such relief, subject to certain conditions. Upon reconsideration, the Division reaffirms that as a condition to such relief, in order to protect customers who receive professional commodities services from A, when the compensation that A receives for such services is paid to the company controlled by A instead of to A in his capacity as employee of another entity, the Company must agree to be jointly and severally liable with the entities (or natural persons) from which A's services compensation or fees were paid
12/28/1995
96-09 PDF Image; Rule 33.3; Other Written Communication
The request of a registered CTA who is also an IB to confirm his opinion that he may withdraw his IB registration and continue to engage in certain commodity interest trading activities solely under his CTA registration is denied because the proposed activities appear to encompass solicitation of customer relationships on behalf of an FCM which is the usual course of business for an IB.
01/31/1996
96-12 PDF Image; Section 5a(a)(12)(A) of the Act; Commission Rules 1.16, 1.56 and 33.4; Other Written Communication
In response to an inquiry concerning whether the Commodity Exchange Act requires that a customer have sufficient funds in his account to margin a position prior to having the position established, the Division of Trading and Markets clarified that while Section 5a(a)(12)(A) of the Commodity Exchange Act generally excepts from regulation by the Commission "rules relating to the setting of levels of margin" (which are promulgated by the individual contract markets), the Commission has promulgated (a) Rule 1.56, which prohibits an FCM or IB from in any way representing that it will not call for or attempt to collect initial margin as established by a contract market and (b) Rule 1.16(d)(2), which requires that an FCM or IB must as a matter of internal controls know that it will be able to collect initial margin from an customer.
07/12/1996
96-58 PDF Image; Rule 3.34; Other Written Communication
The Division of Trading and Markets granted a request for clarification from a firm registered as an FCM and a CTA that registered APs must satisfy ethics training requirements even though they do not conduct any futures or commodity interest business. The Division concluded that, as the APs did not attend an ethics training session that would satisfy the requirements of Rule 3.34 by April 26, 1996, they have been and continue to be in violation of Rule 3.34. Accordingly, the APs must complete their ethics training without delay and the firm is obligated to assure that they do so. The Division noted, however, that this does not absolve the APs or the firm for any past violations of the Act or Commission regulations promulgated thereunder, if the Commission determines that such action is appropriate.
09/18/1996
96-70 PDF Image; 4m(1); Other Written Communication
A firm that provided, among other things, commodity trading advice by hosting seminars for the general public and providing a dial-up phone service to subscribers was advised to register as a commodity trading advisor.
12/30/1997
98-12 PDF Image; Rule 30.10; Other Written Communication
Denial of Relief under Part 30 Order - The Commission determined not to provide relief to a foreign firm under certain orders granted under Commission Rule 30.10 where, among other things, the firm was doing business in, but not domiciled in, the country whose regulatory scheme was reviewed for comparability with that of the U.S. prior to granting the orders ("Host Country") and the firm would be regulated in part by its "home" country rather than solely by the Host Country as contemplated under the orders.
03/12/1998
98-18 PDF Image; Section 4m(1) - CPO and CTA registration requirements; Other Written Communication
The Division of Trading and Markets denied a request for relief from CPO and CTA registration by certain persons who were registered as CPOs and CTAs. The request was based upon, among other things, the low level of commodity interest trading in which the requesters had engaged on behalf of the pools they operated and advised. The Division took the position that notice and comment rulemaking is the appropriate means to evaluate whether an exclusion from CPO and CTA registration for CPOs and CTAs whose commodity interest trading commodity interest advisory activities are de minimis would be consistent with the Act and the public interest. The requesters were invited to file a petition for rulemaking.
03/16/1998
98-19 PDF Image; Section 4m(1) - CPO and CTA registration requirements; Other Written Communication
The Division of Trading and Markets denied a request for relief from CPO and CTA registration by certain affiliated persons involved in the operation and advising of a securities investment partnership where the request was based on representations that the amount of assets used by the partnership for commodity interest trading would not exceed 2%, and that commodity interest trading would not be speculative. CPO registration relief had been sought for the general partner of the partnership and for the directors of the company that was the sole limited partner of the partnership. CTA relief had been sought for the investment adviser of the partnership. The Division took the position that notice and comment rulemaking is the appropriate means to evaluate whether an exclusion from CPO and CTA registration for CPOs and CTAs whose commodity interest trading and commodity interest advisory activities are de minimis would be consistent with the Act and the public interest. The requester were invited to file a petition for rulemaking.
08/21/1998
98-61 PDF Image; Section 4(b); Other Written Communication
Denial of No-Action Relief - The Division of Trading and Markets (Division) determined not to issue a no-action letter to a limited liability company (LLC) that was seeking Deutsche Terminborse (DTB) membership in order to place DTB computer terminals in its offices after approval of its DTB membership but prior to the Commission's completion of its rulemaking process regarding the placement of foreign board of trade electronic trading systems in the U.S. The LLC had been formed for the purpose of carrying out the proprietary trading activities of a U.S. FCM (owned by the same persons that own the LLC) that is already a DTB member and currently uses DTB trading terminals in its offices. The Division noted that in light of the Commission's recent concept release concerning placement of foreign board of trade electronic trading systems in the U.S., the Division issued a letter to the DTB dated June 3, 1998, that was intended to maintain the status quo and to prevent new DTB members from using DTB terminals in the U.S. until the Commission further addresses these issues.
08/19/1998
98-62 PDF Image; Section 4(b); Other Written Communication
Denial of No-Action Relief - The Division of Trading and Markets (Division) determined not to issue a no-action letter to a U.S. FCM that was seeking Deutsche Terminborse (DTB) membership in order to place DTB computer terminals in its offices after approval of its DTB membership but prior to the Commission's completion of its rulemaking process regarding the placement of foreign board of trade electronic systems in the U.S. The Division noted that in light of the Commission's recent concept release concerning the placement of such electronic trading systems in the U.S., the Division issued a letter to the DTB dated June 3, 1998, that was intended to maintain the status quo and to prevent new members of the DTB from using DTB terminals in the U.S. until the Commission further addresses these issues.
08/10/1998
98-66 PDF Image; Section 4m(1) - CPO and CTA registration requirements; Other Written Communication
The Division of Trading and Markets had previously denied a request for relief from CPO and CTA registration by certain affiliated persons involved in the operation and advising of a securities investment partnership where the request was based on representations that the amount of assets used by the partnership for commodity interest trading would not exceed 2%, and that commodity interest trading would not be speculative. The Division denied the requester's subsequent request for interim relief pending formal rulemaking by the Commission regarding an NFA-proposed registration exemption for operators of pools that limit their commodity interest trading to a specified minimal level.
08/21/1998
98-70 PDF Image; Section 4(b); Other Written Communication
The Division of Trading and Markets (Division) issued a letter to Eurex Deutschland (formerly the Deutsche Terminborse and referred to herein and in the letter as DTB) concerning an upcoming DTB rule change that would allow the use of order routing systems (including from U.S. locations) to enter orders on the DTB. The Division noted that in light of the Commission's recent concept release concerning the placement of foreign board of trade electronic trading systems in the U.S., the Division issued a letter to the DTB dated June 3, 1998 that was intended to maintain the status quo with respect to DTB's operations and trading in the U.S. The Division stated its view that a rule change permitting the use of order routing systems in the U.S. would upset the status quo and requested that the DTB issue a letter to its members and sales force stating that its current rules concerning order entry shall remain in effect as to customers and other DTB traders in the U.S. until the Commission further addresses the issue.
09/29/1998
98-71 PDF Image; Section 4(b); Other Written Communication
In light of the Commission's recent concept release concerning foreign board of trade computer terminal placement in the U.S., the Division of Trading and Markets (Division) declined to issue a no-action position to an FCM concerning customer use of order entry systems (OES) to purchase products on a foreign board of trade. The FCM had requested that the Division not recommend enforcement action to the Commission if the FCM or its affiliates provided access to order entry systems to certain of the FCM's customers where the OES would be located outside the U.S. The Division stated its belief that it is not appropriate for it to formulate policies concerning OES use via issuance of no-action letters, but rather it intends to address these issues in conjunction with the Commission's ongoing rulemaking process regarding electronic access to foreign boards of trade.
10/22/1998
99-06 PDF Image; Rule 4.10 (d), Rules 4.21 and 4.22; Exemption; Other Written Communication
The Division of Trading and Markets denied a request for an interpretation that the definition of "pool" in Rule 4.10(d) did not apply to certain investee pools operated by two affiliated registered CPOs solely for the purpose of facilitating the trading of investor pools operated by the same CPOs. The Division exempted the CPOs from the disclosure and reporting requirements of Rules 4.21 and 4.22 with respect to the operation of the investee pools because the CPOs would otherwise be required to deliver Disclosure Documents and periodic reports to themselves.
02/24/1999
99-11 PDF Image; Section 4(b); Other Written Communication
The Division of Trading and Markets (Division) determined not to issue a no-action letter to a member of Eurex (formerly Deutsche Terminbose or DTB) who sought to place a Eurex computer terminal in its office in the U.S. prior to the Commission's completion of its rulemaking process regarding the placement of automated trading systems in the U.S. of boards of trade whose primary locus of operation is outside the U.S. The Division noted that in light of the Commission's recent concept release concerning usage of these automated trading systems in the U.S., the Division issued a letter to the DTB dated June 3, 1998, that was intended to maintain the status quo and to prevent new Eurex/DTB members from using Eurex/DTB terminals in the U.S. until the Commission further addresses these issues. The Division informed the Eurex member that it would still be able to trade Eurex products as a customer though an FCM or a foreign firm that is exempt from FCM registration pursuant to Commission Rule 30.10 that currently operates a Eurex terminal.
05/19/1999
99-23 PDF Image; Rule 4.10(d)(1)-Definition of "pool." Rule 4.13(a)(1)-Exemption from CPO registration. Rule 4.23-Location at which CPO books and records must be maintained.; Exemption; Other Written Communication
The Division of Trading and Markets denied a request that a fund that had decreased in net asset value was no longer a pool or that the CPO was eligible to claim relief from CPO registration under Rule 4.13(a). However, the Division granted an exemption from the specific requirements of Rule 4.23 to the extent of permitting the CPO to maintain its books and records (as a registered CPO) at the offices of another CPO, since all of the first CPO's activities with respect to the fund would be conducted at the second CPO's offices.
11/16/1999
99-51 PDF Image; Rule 4.21 and 4.22; Exemption; Other Written Communication
The Division of Trading and Markets (1) confirmed the continued applicability of an existing exemption from the disclosure and reporting requirements of Rules 4.21 and 4.22 with respect to the operation by two affiliated registered CPOs of certain investee pools operated solely for the purpose of facilitating the trading of investor pools operated by the same CPOs; and (2) extended the exemptive relief to cover the operation of certain additional investee pools made part of the structure that was the subject of the original exemption.
12/16/1999
99-68 PDF Image; Section 20 of the Act; Commission rules Part 190; Other Written Communication
Staff of the Division of Trading and Markets issued a letter discussing the basic legal principles governing the insolvency of clearing and non-clearing futures commission merchants (FCMs), specifically with respect to the status and disposition of retail customer accounts.

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